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San Pablo halts new permits for new cash-for-gold businesses

By Robert Rogers Contra Costa Times

Posted:
04/02/2013 07:15:03 AM PDT

Updated:
04/02/2013 07:38:49 PM PDT

Click photo to enlarge

A "Cash for Gold" operation, with advertising flags and temporary signage, is seen in San Pablo on April 2, 2013. Hyung Son, who operates H. Bee Jewelry, a longtime, full-service jeweler, is having difficulty with his permit to purchase gold as the city deals with a proliferation of "Cash For Gold" operations.

SAN PABLO -- Concerned about a rise in burglaries and robberies, the City Council passed a 45-day moratorium on issuing any new permits for businesses that give customers cash in exchange for gold jewelry and other valuables.

Earlier this year, at least nine cash-for-gold type businesses were operating in the 2.5 square-mile city, said city planner Tina Gallegos. Since then, one closed and four others told city officials they would cease accepting gold for cash.

"We now have four operating without permits and two more have applications in the pipeline," Gallegos said.

City staff said the high concentration of cash-for-gold businesses, which often advertise with sign wavers on the sidewalks, contributed to "visual clutter" in the city and may contribute to a recent rise in burglaries and robberies. High gold prices, hovering around $1,600 per ounce, a sluggish economy and high local unemployment have created a "perfect storm" for the rise in such businesses in the city, Gallegos said.

The council's vote Monday will not affect those currently in operation, but will halt new permits for at least 45-days. City staff said a longer moratorium would be sought before the current one expires so the city can craft a long-term policy.

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San Pablo police Chief Walt Schuld said the businesses are convenient for thieves because their takings can be melted down and untraceable in exchange for quick cash.

"The evidence is pretty compelling" that the rise in cash-for-gold businesses is correlated with rising jewelry thefts, Schuld said.

Jewelry theft accounted for 30 percent of all robberies in 2012, up from less than 4 percent of all robberies in 2008-10, according to city statistics. About 41 percent of all burglaries involved jewelry theft in 2012, up from less than 30 percent from 2008-10.

But several merchants and property owners disagreed, saying there is no conclusive link between crime and cash-for-gold businesses and insisting that business owners keep records and can help police recover stolen property.

"The statistics do not mean that these businesses have increased crime," said Dennis Hill, a local developer and property owner.

Hill urged the council to work with the business community during the moratorium before it passes any new ordinances.

Cathy Yovanov of The Stanley Group, which manages a shopping center where one of the cash-for-gold businesses has applied for a permit, said the merchants have continued to operate because the city has delayed issuing permits.

"They're not illegal by choice," she said, adding that most will continue to operate during the moratorium.

Mayor Genoveva Garcia Calloway said the council does not "want to put anyone out of business" but needs the moratorium to halt the spread while it gathers information for a longer-term solution. Councilman Rich Kinney was skeptical that cash-for-gold businesses will cooperate with police and follow all guidelines, given the money involved. City Manager Matt Rodriguez said the businesses were "lucrative" and continued to operate without permits.

"There is just no way of knowing whether you are complying," Kinney told the merchants. "And my residents continue to be burglarized."